I know when you are first starting to look for a home - the entire process can be overwhelming.  How many times lately have you called on a property you saw advertised, only to be asked if you are prequalified?  Confusing isn't it?   Why bother talking to a lender until after you find the perfect home.  The answer is fairly simple.  Being prequalified in todays market, is like your "Ticket to Buy"!  

With so many of the homes currently on the market being Real Estate Owned (REO's - that's a whole different blog we will get to on another day!), most sellers (banks and the Gov't owned homes) are not interested in taking their properties  off the market  without some reasonable assurance the property will actually make it to closing.  You will basically find this process very simple.  While  the methods vary from lender to lender, the goal is to determine your purchasing ability based on credit scores and income and outgo.  Obviously,  the most important process is the pulling of credit records.  Todays lending practices are changing on a daily basis - no, scratch that -  on an Hourly basis - and your credit score will determine not only whether or not you can buy at this time, but also, what interest rate you can expect to pay.  Some lenders will be prepared to do this with just a simple telephone conversation, others prefer to meet you personally or ask that you take a moment to answer some simple questions on line.  Once you are prequalified, the lender will issue you a "prequal letter - your, Ticket to Buy!  This letter is normally submitted with any offer you make by your Buyers agent to the Sellers agent, showing not only your seriousness in purchasing, but your predetermined ability to purchase.   Please understand, this is not a total pre approval and should never be considered as such.  This letter generally states that, based on current credit worthiness and subject to several additional requirements ( verification of income, appraisal and condition  of property etc., etc,),  you are qualified to purchase a home.  Generally, this is a FREE service and you are not locked into any particular lender - so, feel free to still shop around.  Like finding the right Realtor, it is very important to feel comfortable with your lender representative.  

To get started, check with your Realtor for a list of several names, or go to your local financial institution today and ask for that "Ticket to Buy".  Once in hand, it can be a wonderful help in the negotiation process as it confirms your seriousness and ability to buy.

 Good Luck and until next time.........